Crisis Hits Pension Funds: Government of Kast Urges Retirement Postponements Amid Massive Losses

Original article: El colmo: las AFP arriesgaron los ahorros y el Gobierno de Kast pide postergar jubilaciones tras millonarias pérdidas previsionales

In the midst of a crisis triggered by the Administrators of Pension Funds (AFP) risking member savings and incurring massive pension losses, the government of José Antonio Kast has gone so far as to request a postponement of retirements.

Pension funds reported a shocking loss of $7.7 billion due to investments tied to U.S. interest rates, with an estimated impact exceeding $11 billion on retirement savings. The Fund E, deemed the safest option within the system, which includes nearly 770,000 members—of whom over 60,000 are over 60 years old— experienced a 10.4% real decline from January to September 2026, marking its second worst performance on record. Meanwhile, Fund D reported a reduction of 6.38% during the same timeframe.

Initially, La Moneda’s reaction was to link the crisis to decisions inherited from the administration of former president Gabriel Boric. However, in light of the ensuing controversy and public dissatisfaction, Finance Minister Jorge Quiroz made a shift in narrative and directed blame at the AFP for the crisis. He even expressed support for the punitive actions initiated by the Superintendence of Pensions against the seven administrators, aimed at investigating potential violations of Article 147 of Decree Law 3,500 and General Standard No. 340, enacted in July 2025, as well as determining any liabilities related to investment decisions that particularly impacted Funds D and E.

Nonetheless, Kast’s administration has encouraged members nearing retirement to consider postponing their withdrawals for a few months, while investigations into the AFP’s investment decisions that caused the losses continue.

«We urge individuals to avoid making hasty decisions, and If possible, to postpone for a few months,» said Minister of Labor Tomás Rau during a press briefing at La Moneda on Thursday.

The government is advising those eligible to start their retirement to contemplate delaying it, given that their pension accounts have suffered losses, and there is still no clarity on the potential recovery of those funds.

While the secretary of state noted that the Superintendence of Pensions’ investigation is ongoing, he acknowledged that there is currently no concrete information regarding whether this process will result in penalties for the AFP, or whether measures for restoring patrimony will be implemented for members affected by the massive losses.

“We need to understand this investigation, whether there will be penalties and restitution of assets or not. If individuals can delay their decisions in the coming months, being cautious is wise,” Rau asserted in statements reported by El Mostrador.

He also urged those who cannot postpone retirement to gather sufficient information before making their decisions, as annuities may also adjust their terms.